My final interview in Lima was with Professor Karen Weinberger who runs the entrepreneurship program at Universidad del Pacifico in Lima. Universidad del Pacifico has been leading the charge to build Peru’s entrepreneurial ecosystem and has a variety of courses, events, programs, and services to help entrepreneurs build their businesses and build the ecosystem and community around entrepreneurship and startups. Because she works directly with students, Professor Weinberger has a unique view of the next generation of entrepreneurs and the building of the ecosystem.

She notes that the improvement in Peru’s economy has actually drawn young people away from entrepreneurship, at least temporarily.

“Now that it’s a very good economic climate and a very good labor market,” Karen said, “students prefer to go out, get a job, and then later start their businesses with their own savings.”

The trouble is, once they start working, it becomes difficult for young people to walk away from the security of their jobs.

“People want to invest in businesses and want to have businesses but they don’t want to give up their salaries to do it.”

Despite the temptation to stay at a bigger company holding back some potential young entrepreneurs, Karen sees the overall environment as positive in Lima.

“It is very easy to start a company,” she said. “Small businesses have a special system for taxes – you don’t have to pay full taxes if you’re a small business” and, “in Peru, there are a lot of people that have money that want to invest in companies…Local entrepreneurs know that there are very good opportunities here.”

However, she does identify some negatives, mostly associated with the newness of the ecosystem.

“There’s a very informal mentality and I think we still need to work on that,” she said.

“For example, you see students that think they have an extraordinary idea and are ready to go look for investment but if you talk to them they haven’t done very good research on the market, they don’t know the size of the market, and they think they can just sell based on a feeling.”

Additionally, a focus on bringing in sophisticated investors from the outside isn’t going to have a very large impact because, “startups usually don’t look for venture capital here. They look to family friends, their own families, their own savings. It’s not very common to have young startups or young entrepreneurs with venture capital.”

So where does Karen see the ecosystem in five years?

“Five years ago people were talking about entrepreneurs and not enterprises,” she said. “In another five years I hope that people should be talking about enterprises and not entrepreneurs…because we need many more small and medium companies than so many startups with entrepreneurs who do it more for the experience than because they have the passion, skills, and experiences to be good entrepreneurs and to build good enterprises.”

Are you connected to the entrepreneurial ecosystem in Peru? Let me know what you think of Karen’s thoughts in the comments section below.

Next stop in Peru: Wayra. By now I’m sure you’re all familiar with Wayra as I’ve already posted interviews with the Wayra teams in Chile and Argentina. In Peru I got to meet with Luis Lira who was gracious enough to give me a tour of the Lima offices and share his insights on the entrepreneurial ecosystem and startup scene in Peru.

My next interview in Lima was with Arturo Cánez, the Director of Lima Valley and Co-Founder of Startup Academy. He’s also a mentor for Wayra Peru and is incredibly involved in the entrepreneurship community in Lima in many ways. Through his various initiatives, he works to provide events that both foster a community of entrepreneurs and offer training to aspiring entrepreneurs.

While Lima ranks high when it comes to entrepreneurship on measures like those used by the Global Entrepreneurship Monitor, much of the entrepreneurship in the country has historically been that of necessity and wasn’t the high-growth, technology-driven entrepreneurship that gets lots of press. Therefore, even though Peru actually ranks very high in entrepreneurial activity, its startup ecosystem is still a bit behind those in other countries. However, people like Arturo are helping to change that rather rapidly.

“The ecosystem now is better than just one year ago,” Arturo said. “We have the fastest growing entrepreneurial network in Latin America…What other countries did in 5 years we did in 1 year and we did it without the support of the government.”

There’s still a lot of work to be done, however, to transform Peru from a country built on entrepreneurial necessity to one with a thriving culture of entrepreneurial innovation.

“For the stage our country is at right now, we have a lot of copy-cat ideas,” Arturo noted. “95% are maybe imitation and the other 5% are innovation.”

This preponderance of copy-cat companies is step one in the growth of a new startup hub and truly innovative companies are bound to come soon once entrepreneurs fully commit to their new ventures. According to Arturo, lots of entrepreneurs in Peru have a day job and are working on their startup on the side. “There are a lot of innovative ideas, innovative companies here in Peru and in Latin America,” but people are scared to leave their jobs and do their startup full time.

Additionally, Arturo argues that

“today, it’s easier here in Peru to get funding than in a different country or even in Silicon Valley…there is a lot of private capital but that capital is not necessarily focused on technology companies.”

He also believes that more accelerator programs focused on technology startups are needed to help anchor the entrepreneurial community in Lima and that the community shouldn’t focus solely on tech and business experts.

“We believe that a new venture, a new company, works better with different skills,” Arturo said, “not only business and technology…so that’s why we promote a multidisciplinary community.”

Finally, Arturo sees the future of the entrepreneurial ecosystem and startup community in Lima intimately tied to the other hubs in Latin America.

“You have, here in Peru, markets that are growing so fast,” Arturo said. And “at this time we need to detect what we are doing different than the other countries…[However], I think it’s so important that new entrepreneurs focus not only on their own country and take not only a local view…We want to focus on our local community but we’re connected to more developed countries…and we believe that those connections help to create a stronger environment.”

In fact, Arturo sees these connections as the future of the ecosystem.

“I think that in 5 years we’re going to have Latin America connected, a lot of countries linked, and a lot of startup entrepreneurs doing their jobs in different countries. In 5 years I think we will have a Latin America with an ecosystem similar to Silicon Valley.”

This week we’re talking with Alejandro Mayta, the organizer of Startup Peru. Startup Peru is a bit different than Startup Chile or Startup America because it’s completely private and Alejandro is building it without the support of the government (the Peruvian government is working on their own initiative with a different name). Alejandro has been involved in entrepreneurial projects of his own and is learning more and more about the ecosystem as he builds up Startup Peru, so it was interesting to hear his take on what the entrepreneurial ecosystem in Lima is lacking.

One of the key problems that Alejandro sees in the Peruvian entrepreneurial ecosystem is a lack of talent skilled in the business side of building startups. Unlike in the U.S. where technical talent – programmers, designers, etc. – are a hot commodity, Alejandro says that it’s actually fairly easy to find top technical talent in Lima but that filling out the business side of the team is difficult.

Along those same lines, he says that it’s difficult to find qualified mentors and role models for new startup teams. Even in the organized programs, if you ask a mentor what his business is/was he’ll respond saying, “No, I’m not an entrepreneur, I’m just a mentor,” because he’s likely coming from a corporate background. While he can still be very valuable to the new entrepreneurs, there are going to be things that would be better addressed by someone who has gone through the process of building a business from nothing.

This lack of mentors due in large part to the fact that Peru doesn’t have any startups (with the exception of Papaya) that have successfully been able to expand to other countries and it doesn’t have examples of big exits. Peruvian startups stay entirely Peruvian and Peru is a very small market, so finding huge success stories like Mercado Libre and pulling from their founding teams for mentors is basically impossible.

“More than just innovation we need knowledge and understanding of what it is to build a business,” Alejandro said.

He feels that Peru is behind in understanding and learning about widely known startups concepts in other countries, for example, the principles of lean startup, minimum viable product, and pivoting rapidly. And Peru is also behind in certain infrastructure – internet bandwidth and the adoption of ecommerce, for example – that would encourage and support the creation of rapid-growth businesses. This is partly because there isn’t a community that works together to push Peru forward.

“The worst thing [about being an entrepreneur in Lima] is the lack of cooperation between us. There isn’t trust. We don’t share,” Alejandro said.

It’s difficult to see rapid growth in an entrepreneurial community when its members won’t help and support each other.

Finally, Alejandro said,

“Investment doesn’t exist…It could, but it’s an enormous problem and it depends in large part on the politicians.”

Despite all of those hurdles, Alejandro does see Lima as a city ripe with possibility and is committed to building a vibrant entrepreneurial ecosystem there.

“The best thing about being an entrepreneur in Lima is that there is still a lot of undiscovered opportunity,” he said.

The question, then, is how do people like Alejandro go about taking advantage of that undiscovered opportunity and building a startup community that supports and shares with each other?

Upon my arrival in Lima (the second time because the first time I was in full tourist mode for my 1 day in the capital before heading off to Machu Picchu and Lake Titicaca) I was greatly impressed with the amount of energy swirling around about entrepreneurship. While the startup ecosystem didn’t seem to be quite as mature as many of those in some of the other capital cities I visited, the energy was palpable.

Overall, Lima gives the impression of being a bit less advanced than many of the major cities in Latin America, but it’s still holding its own as it develops and the entrepreneurs in the area are committed to making it a tech hub. Additionally, it was the only city that I visited in my entire journey where a lack of access to capital wasn’t continually mentioned as a major barrier to entrepreneurial growth.

When I looked into data on entrepreneurship in Peru using the GEM data visualization tool I was surprised to see that Peru actually trounces the U.S. in entrepreneurial activity but that there has been a decline in the past few years. This data runs counter to what I experienced in the city, but I only met a small sampling of those involved in the entrepreneurship world.

Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business.

Percentage of 18-64 population who are currently a owner-manager of a new business, i.e., owning and managing a running business that has paid salaries, wages, or any other payments to the owners for more than three months, but not more than 42 months.

Clearly, there is a lot going on in the entrepreneurial ecosystem in Lima, Peru so stay tuned to see what the key players on the ground there had to say about the ecosystem and its growth.

Obviously, after my amazing vacation to Machu Picchu and Lake Titicaca in Peru, it was back to the capital, Lima, to get some work done. In a few weeks you’ll be able to learn about the entrepreneurial ecosystem in Lima over at Startup Nomad (we’re still in Argentina on that blog). However, I also managed to do a little bit of exploring in my down time in Peru’s capital city.

While I have to say Lima was probably one of my least favorite cities in all of my travels ever based on pure aesthetics, the food there was absolutely amazing! Because I was more interested in stuffing my face than in taking in the sites and architecture, this week’s video is pretty short, but it does give you a look at a bit of the downtown historic area of the city, so enjoy.